FactSet Earnings: Revenue Growth Decelerates but Margin Growth Impresses

FactSet reported a mixed fiscal third quarter with the revenue side seeing some modest headwinds while lower expenses resulted in strong margin expansion. Organic revenue grew 4.5%, a downtick from 6.0% in the second quarter. In addition, FactSet modestly lowered its fiscal 2024 outlook for revenue and annual subscription value, or ASV, growth. On the other hand, adjusted operating expenses were down 1%, resulting in adjusted operating margins expanding to 39.4% versus 36.0% in the year-ago quarter. Overall, we will maintain our narrow moat rating and $395 fair value estimate on FactSet shares.